The Kingdom of Saudi Arabia are planning to construct up to 300, 000 housing units alongside the private sector in addition to taxation changes over the coming three years.
As part of Vision 2030, the Kingdom is launching numerous initiatives to meet Saudi consumer and investor needs. This month alone, up to 60, 000 landowners were billed under a new cycle of “White Land” fees: a move done to sustain development whilst easing the housing shortage in the capital.
White Land Regulation
Amendments to land taxes in KSA will increase the development of undeveloped land for property owners for longer durations of time.
In turn, owners of undeveloped land will be subject to an annual tax of 10% equivalent to the property’s value. This tax equates to a three-fold increase from previous regulation. The tax was legislated last year and comes into force this year.
The law will only apply to land exceeding 5, 000 square metres.
KSA Indirect Taxation
Compared to other GCC states, Saudi indirect taxation is also high compared to GCC neighbours.
The value-added-tax is the highest in the region (15% VAT) compared to the UAE, Qatar, and Oman (5% VAT).
VAT and the White Land fees aim to broaden the KSA tax base at a time when Vision 2030 is in full force as investors prioritise diversification by privatisation.
Saudi Estate Market in Upwards Slope
KSA’s largest listed developer, Dar Al-Arkan and its subsidiary Dar Global, recently announced an agreement to build two Trump-branded projects in the Saudi capital with a net value of $10B.
The Emirati developer, Omniyat under Mahdi Amjad, is planning to launch a $5B project in the Kingdom this year.
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